As Lyrica patent expiry looms, Pfizer buys Array for $11.4bn

Pfizer has a made a $48 per share play for Array Biopharma, which values the cancer specialist at $11.4 billion.

The offer – which is a 62% premium over Array’s closing share price on Friday – would give Pfizer two already-marketed drugs for melanoma, as well as royalties on partnered products as well as a pipeline of experimental therapies.

Pfizer has made no secret of its desire to make a number of bolt-on deals to bolster its product portfolio and pipeline as it copes with the loss of patent protection on key products, including Lyrica (pregabalin) which is already facing generic competition in some markets and will lose exclusivity in the US this month.

It is facing an estimated $2.6 billion impact this year from generics, and buying Array gives it two drugs – MEK inhibitor Mektovi (binimetinib) and BRAF inhibitor Braftovi (encorafenib) – that made $35 million in the first three months of the year.

While still in the roll-out phase, Mektovi and Braftovi almost doubled survival compared to Roche’s Zelboraf (vemurafenib) in a pivotal trial of melanoma with BRAF mutations, giving the combination a strong competitive position against a drug that Bloomberg estimates will make around $170 million in sales this year.

Zelboraf has however lost out in the market due to competition with Novartis’ MEK/BRAF inhibitor duo Mekinist (trametinib) and Tafinlar (dabrafenib) which grew 31% to $1.12 billion in sales last year and is now than main competitor to Array’s drugs.

Array is trying to expand the use of the combination into new indications, and has also just reported data from the BEACON CRC trial showing that the combination of Braftovi, Mektovi and Eli Lilly’s Erbitux (cetuximab) could offer a chemotherapy-free option in colorectal cancer, reducing the risk of death by 48% compared to control.

The results could be used to file for US and EU approval, according to some analysts, and approval in colorectal cancer could drive sales of the two drugs towards blockbuster territory, particularly with the help of Pfizer’s marketing muscle.

Pfizer chief executive Albert Bourla said the new deal will help the company “create a potentially industry-leading franchise for colorectal cancer alongside Pfizer's existing expertise in breast and prostate cancers.”

The big pharma group has been working with Array since 2017, when the two companies agreed to study several combination regimens in non-small cell lung cancer (NSCLC), pancreatic cancer and other solid tumours, pairing Array’s drugs with Pfizer’s PARP inhibitor Talzenna (talazoparib) and Merck KGaA-partnered anti-PD-L1 Bavencio (avelumab).

Buying Array will also give Pfizer royalties on drugs such as Bayer’s recently-approved Vitrakvi (larotrectinib) for TRK fusion cancers as well as a string of experimental drugs such as AstraZeneca’s MEK inhibitor selumetinib for neurofibromatosis type 1 and Seattle Genetics’ oral HER2 inhibitor tucatinib.

Pfizer said it expects to complete the deal in the second half of 2019.